M&M reinvents itself with big digital focus

The Mahindra Group, the $22-billion auto to IT services conglomerate, is going big on rolling out separate new- age digital platforms across multiple areas including SME financing, insurance, agritech and healthcare as part of its strategy to use technology to deliver better products at lower costs to consumers

Speaking to BusinessLine , Anish Shah, who has recently taken over as the first professional Managing Director and Chief Executive Officer of Mahindra Group, said: “Digital piece is a very important piece for us. If you look at SMEs segment — the Mahindra group buys ₹30,000 crore worth of products from auto component makers and other small businesses. We are thinking of making an SME receivable finance platform which will be a great starting point. Similarly, in agtech space, we work with a number of farmers and start-ups. Insurance is the third area. These are areas where we have enormous strength in our group businesses and trust in our brand by our consumer. We are leveraging that to build our digital platforms.”

In the insurance space, Mahindra has an insurance brokerage firm, which also has a platform as a marketplace today. “While we scale this marketplace, we are looking at a digital-led insurance company where we may set it up on our own or do it with a partner,” Shah said.

Digital financing

Mahindra has also set up a digital finance company for personal loans and credit for buying consumer durables. “The next one will be around SME financing, agtech will be soon after that or in parallel, insurance comes after, and then comes health,” Shah explained.

“Healthcare is a little further away, because we need to find the right set. There are a number of things happening in healthcare right now. But it has to be truly differentiated something where the consumer would say, that’s what I really want. So it will be tech enabled, again, with, obviously a significant focus on digital as well as the ability to have data in a way that makes sense for the consumer,” he added.

Roping in entrepreneurs

But how will Mahindra compete with start-ups which are faster and more agile? Shah reckons that Mahindra already has good presence in each of the areas. “For us to convert to a platform is much easier. For example, if we look at agtech, we’re working closely with a very large number of farmers today on a wide range of technologies. We have an app that is used by them regularly. So these are not start-ups, these are scale ups. They are starting from a base which is far greater than what any start-up would have,” Shah said.

Mahindra is also planning to bring in entrepreneurs to run these new platforms. “That’s the reason why we are calling it separate as a new-age digital platforms. We will not control them; we will allow the entrepreneurs to run them independently. Because that agility, that speed, the ability to pivot where required, all of those things are going to be very essential for them. We will give it all the ammunition, and we will say here, this is a tremendous amount of ammunition, go run with this now and scale up,” Shah said.

For Shah, digital and use of tech is not new. Earlier as the group strategy officer, he had set up a team to work on using new technology platforms including AI and IoT across the group’s businesses. “ We had started the journey many years ago because it really impacts how the consumer sees the product, the company and their experience. What we have seen over the last few years is that consumer expectations have gone up a lot. The head start we have had on digital has helped us. The primary focus is to deliver good consumer experience to the consumer- where they can access any product or service in any manner they want. Secondly, digital drives improvement in product development, and at the same time reduces cost,” Shah said.

Mahindra’ initial bets on using online platforms has already brought dividends. For example, the investment into First Cry has grown the company to hit a valuation of $1.7 billion, used auto sales platform First Choice wheels is in midst of fund raising right now, and on-demand logistics provider, SmartShift is now valued at Rs 3750 crore after merging with tech enabled losgistics player Porter. With these successes behind him, Shah is looking to replicate the model in new areas.

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